$125.5 Million Deal: Callaway Golf Company To Acquire TravisMathew

CARLSBAD, CA – Callaway Golf Co. announced Thursday it has entered into a definitive agreement to acquire TravisMathew, LLC, a golf and lifestyle apparel company based in Huntington Beach, for $125.5 million in an all-cash transaction.

"We are very excited about this acquisition," said Callaway President and CEO Chip Brewer. "With its golf heritage, culture of product excellence and double-digit growth in the golf and lifestyle apparel business, TravisMathew is a great fit with our business, brands, culture and our strategy to grow in areas tangential to golf."

The acquisition is "subject to a working capital adjustment" and customary closing conditions, including securing regulatory approvals, according to Callaway, and is expected to close in the third quarter of 2017. Post-acquisition, TravisMathew will continue to operate out of its Huntington Beach headquarters.

TravisMathew's net sales are expected to be in the range of $55-60 million this year, of which $10-15 million would contribute to Callaway's 2017 second half financial results, assuming the transaction closes in the third quarter.

Callaway intends to finance the transaction with cash on hand and borrowings from its asset-backed credit facilities.

Callaway manufactures and sells golf clubs and golf balls, and sells bags, accessories and apparel in the golf and lifestyle categories, under the Callaway Golf, Odyssey and OGIO brands worldwide.

Founded in 2007, TravisMathew is a men's sportswear brand with domestic distribution in department stores, country clubs, resorts and TravisMathew's retail stores.

Also Thursday, Callaway announced that second quarter net sales increased $59 million to $305 million, when compared to the same period in 2016. The company also increased its full year sales guidance to $980-$995 million, as compared to its prior guidance of $960-$980 million, and earnings per share guidance to 40-45 cents compared to prior guidance of 31-37 cents.

By City News Service / Image by Krzysztof Urbanowicz via flickr.com, under Creative Commons